The Karnataka High Court has rejected a solar project developer’s plea to complete the construction of a solar project in Karnataka’s Raichur district since the land on which it is being built is disputed.

Hinduja Renewables Two, a special purpose vehicle of Hinduja Renewables Energy, submitted to the court that after due diligence it had decided to develop the 26 MW solar project investing about ₹1.46 billion (~$17.76 million). Of the 26 MW, 14.25 MW has already been commissioned. The developer claimed that it had all the necessary permissions from the government. A trial court had recorded that the respondents—both minors—will be put to loss and hardship in getting their share if Hinduja Renewables proceeded with the construction work.

Background

The two respondents had approached the lower court seeking a one-sixth share in the joint-family property managed by their grandfather after the demise of their father. The grandfather and his other children entered into an agreement with the company to develop a solar project on their property at Mallata village in the Raichur district. The petitioners claimed that their share was 35 acres of the total property.

The developer said that it had obtained approvals from the government and other statutory bodies and that the project had been partly commissioned. It had received provisional interconnection approval from the Karnataka Power Transmission Corporation (KPTCL) to charge to the 110 kV evacuation line. The 14.25 MW solar project had been approved by the KPTCL, and Gulbarga Electricity Supply Company (GESCOM) also issued the commissioning certificate on November 20, 2021.

An inverter control room and solar modules for 8 MW were constructed much before the trial court passed the order. The functioning part of the project for 14.25 MW was completed, approved, and commissioned before entering into a registered sale agreement dated June 18, 2021.

The developer had issued a public notice through newspapers calling for objections from anyone with land rights. The company claimed it had not received any objections.

The company also contended that it had taken all necessary precautions before entering into the registered sale agreement with the respondent’s uncle. The uncle was paid ₹15,417,400 (~$187,544) on the date of the agreement. On the same day, the uncle had also executed a registered irrevocable General Power of Attorney.

The company stated that regular maintenance would have to be carried out to ensure the smooth operation of the project. The order passed by the trial court came in the way of regular maintenance work.

The respondents stated that the developer had deliberately, knowing fully well about the pendency of the suit and the right asserted by the respondents, executed the documents and carried out construction in violation of the trial court’s order.

The respondents also claimed there was an oral partition in 2015, and their father was allotted 35 acres and 62.5 cents of land. Revenue records of the property were transferred in the respondent’s father’s name, and he had also mortgaged the property and availed loan.

High Court’s analysis

The court observed that several documents executed in favor of the developer were after the respondents filed the lawsuit in the trial court. The developer was a mere agreement holder as of the date of the lawsuit.

Referring to an earlier verdict by the Supreme Court, the High Court ruled that the developer could not claim any right, title, or interest in the property by the registered sale agreement. Despite being aware of the respondents’ rights on the property, the developer went ahead with the construction of the project. Having noticed the rights asserted, the developer ought to have taken sufficient steps to mitigate the risk but had failed to do so.

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